Introductions

Brow Frowed and J.K Puri {the executive director of optimizations} sat back in his New Delhi office to take stock of the complexity of the issues he faced.

That is….• Deregulated oil and gas sector in INDIA.• Unfamiliar with competitive environment.• Not used IT in proper way.

Introduction contd……

Implement Project MANTHAN. It had been planned in two phases• The first involving 99 sites.• The second in over 500 sites. Problems in Project MANTHAN

Public sector undertaking & DEREGULATION :

After independence in 1947… the 1950s & 1960s saw the emergence in India of

several public sector undertakings & govt. control in core industry sector…..

from micro electronics to aircraft manufacture. Problems in PSUs…..In 1992, the Indian govt.-as part of a decisive move to

stimulate the economy of INDIA…

Oil industry deregulation :

Since 1976, the oil industry had operated under the government-controlled administered price mechanism {APM} for petroleum products.

A strategic planning group set by the Indian govt.. with the commission of the Jamnagar refinery by

Reliance Industries in the late 1990s.

Indian oil corporation ltd….

Indian Oil Company Ltd. merged with Indian Refineries Ltd to from Indian Oil Corporation Ltd.(IOCL).

In fiscal year 2002, it was ranked 191. Ranked 500 in Fortune Global. IOCL had a divisional structure based on business

lines that reflected the individual companies before merger.

Information technology at IOCL:

• EDP was introduced in 1966.• In 1986 Personal computers (PCs) was introduced.• The first online transaction processing program was

implemented in 1989.• TDM for marketing department.• FMS for finance department.• MMS for material management system.• OMNIS for online maintenance & inspection system.

Problems in it system:

• Technology gap.• Y2K .

PROJECT MANTHAN

Project Manthan was an opportunity to ‘integrate ’ the company using an IT-enabled system.

To initiate the process of IT-based re-engineering, workshops were conducted by the functional expertise resource group with about 300 representatives from different areas of the IOCL business.

SCOPES• To develop a corporate IT strategy, taking the available technology and capability

into account.• To define the “deliverables” from the corporate integrated information system,

considering the “best practices” followed worldwide, especially in the petroleum industry.

• To determine the needs for upgrade and addition of hardware and software.• To examine the availability of in-house skills as well as the current systems set-up

and to recommend the structure and the skills required for operating, maintaining, and upgrading the proposed corporate system.

• To design the system with open architecture so that the continuing advancements in technology for hardware, software, and communications can be seamlessly assimilated without disrupting the totality of the process.

• To carry out trial implementation, de-bugging, and stabilization of the system .

• To continue the association for the purposes of post-implementation system and process maintenance, upgrades, and modification, training, education, and support in general, including continuous updating of the “best practices” database.

OBJECTIVES

• Seamless integration of business processes and information flow

• Centralized control with decentralized customer response

• Standard, accurate, real time data to support decision-making

• Extensive ‘drill-down’ reporting capabilities for analysis of trends

• High degree of reliability and security

• Communication connectivity across the Corporation

In April 1997, Price Waterhouse Associates (now PwC) was assigned the task of conceptualizing, designing and implementing an integrated information processing system across IOCL..

In July 1998, PWC submitted the conceptual technology plan.

• In October 1999, IOCL selected the internationally-reputed ERP package, SAP R/3. The system would be accessed company-wide over a hybrid wide area network.

• The project was to be completed in four stages: • (1) conceptual design, • (2) detailed design, • (3) construction, and • (4) implementation.

• One of the biggest challenges to adopting the new IT system was the level of computer proficiency in the organization.

• Nearly 9,500 employees in executive and supervisory roles, a large proportion had little experience with computers.

• Apart from launching IT-based training, in 1999-2000, IOCL provided personal computers for home use to all 9,500 executives and supervisors as a means to enhance overall computer literacy and skills

Going live…….

R&D become first to go-live site on 31 August 200122 pilot site were to go-live on 1 September 2001Core team favored the R&D as it offer advantage

1. Transaction opportunities for most SAP modules2. Proximity to head office & project Manthan team Gurgaon, become second to go live on SAP

R/3software on 31October 2001

Cont…..

A dozen locations were short-listed 1. Panipat 2. Faliure of communication link: VSAT3. Go back to leagacy system and roll back SAP

implementation

The data generated at the central site from all location of IOCL will be backbone for customized portal

The Response Time Issue

V.N.K Reddy, manager of basis team pointed out:-

1. Designed response time-2000ms2. During the first weeks of March & April system slow down

P.S.Negi pointed out:-1. The bijwasan terminal is life line for Delhi2. During the first weeks of March & April system slow down

Problems

• Response time• Hardware configuration and installation• Database design and installation• Nature of the processes as well as their loads• Communication bandwidth limitation

Alternative

• Schedule all reporting and batch jobs after hours when the transaction load was light but was unsure how end-user would responds to this deferral

• To remove reporting load from the database server and shift to a business warehouse server

The Future Course…..

Puri replaced the decentralized system by the centralized SAP R/3 system.

Puri was confident that IS personnel from the various locations could be retrained in the new technology so that IOCL would have the capabilities to roll the system out to the remaining sites under Phase II.

He was also unsure about how IS personnel at the various divisions would respond to their changing roles and responsibilities and to new management expectations.

Puri realised that poor response time was the biggest issue.

Any successful resolution had to address not only

the 66 sites currently on SAP R/3 but also had to ensure that events such as the ones they had faced did not occur when the load from the remaining 500+sites was on the new system